DCG considers selling assets to pay $3b Genesis debt

Digital Currency Group (DCG), the conglomerate that owns crypto broker Genesis, is reportedly considering selling assets from its portfolio to pay Genesis’ $3 billion debt. 

DCG explores selling VC assets to raise funds 

To generate new funds, Digital Currency Group is exploring options, as the collapse of FTX in November caught its subsidiary Genesis off guard. As so, a source close to the matter has confirmed that DCG is looking into selling a portion of its venture capital portfolio, which is estimated to be worth around $500 million. 

Digital Currency Group (DCG) is a venture capital firm that invests in and builds companies in the digital currency and blockchain space. It was founded in 2015 by Barry Silbert and is one of the biggest projects supporting crypto projects and companies early on. 

DCG has a diverse portfolio of companies across the digital currency and blockchain space, including CoinDesk, a leading news and analysis outlet for the crypto and blockchain sector; and Grayscale, a digital currency investment manager.

In addition, DCG has a large venture capital portfolio, which includes investments in more than 150 companies, including well-known names such as Coinbase, Circle, Ripple, and Kraken, as well as less well-known companies. According to a knowledgeable source, DCG’s assets may take some time to sell.

Genesis another victim of the FTX debacle

As a subsidiary of DCG, Genesis was a leading player in the lending market for digital assets, allowing individuals to lend their coins for substantial returns. However, as a result of the market disruption caused by the collapse of FTX, Genesis suspended customer withdrawals in November and attributed the decision to the “unprecedented market turmoil”.

Genesis currently owes $900 million to customers of Gemini, €280 million to Dutch exchange Bitvavo, and an additional amount to customers of crypto savings firm Donut. There is a separate group of Genesis creditors who are being represented by Proskauer Rose, as per sources familiar with the situation.

Genesis has sought the assistance of an external party to assist in determining the next steps, however, as of now, no external funding has been secured. The CEO of DCG, Barry Silbert, informed shareholders that in a bid to decrease expenses, 30% of the workforce at Genesis was laid off and the wealth management division was closed.